China e-commerce SaaS player Dianxiaomi raises $150m
Chinese e-commerce software-as-a-service (SaaS) provider Dianxiaomi has secured a USD 110m Series D round led by SoftBank Vision Fund 2 and Sequoia Capital China.
Other investors include Tiger Global Management, GGV Capital, and Huaxing Growth Capital, China Renaissance’s flagship investment management fund.
It follows a 100m Series C led by Tiger Global and Huaxing in March. GGV, CDH Investment, and Gaorong Capital provided about USD 44.3m in Series B funding last year with support from Kunlun Fund.
Founded in 2014, Dianxiaomi initially focused on enterprise resource planning (ERP) for Chinese merchants, selling via US-based e-commerce platform Wish and covering product publication, order management, logistics, and customer service. It then expanded to eBay and Amazon.
The company observes that merchants want a one-stop solution that works across different e-commerce platforms, but operating across markets has presented challenges. For example, the mainstream e-commerce platforms are different in each country in terms of operating rules for product publication, logistics, payments, and after-sales services.
In Southeast Asia, Dianxiaomi is known for its BigSeller platform, which facilitates inventory, order management, and data analytics for traditional retailers setting up e-commerce operations. With 430,000 local e-commerce sellers, it is one of the leading ERP providers in the region. There is also a Latin American service called UpSeller.
Operations involve collaboration with some 50 major e-commerce platforms, more than 1,600 logistics providers and 80 warehouses globally. The company facilitates the processing of more than CNY 350bn (USD 51.6bn) in orders a year for around 1.2m merchants globally, according to a statement. It is said to have grown more than 100% a year in recent years.
Dianxiaomi is headquartered in Shenzhen and maintains branch offices in several cities across China as well as Indonesia, Malaysia, and the UK.
Dianxiaomi adopted a freemium model to achieve scale and is said to have turned profitable in a relatively short period of time. Basic functions have been free of charge since day one, ensuring a large customer base and relatively low customer acquisition costs. The company hasn’t retained a sales team for years, preferring to rely on word-of-mouth marketing and product-led growth.
“To some extent, free services establish a threshold and this moat will only get higher and higher. At the same time, paid services require continuous product development and refinement,” said Yanchu Zou, a principal at Huaxing, told AVCJ in March. She believes Dianxiaomi has a strong enough value proposition to withstand competitive threats from large internet platforms.
Other recent activity in China's e-commerce enablement space includes a USD 150m investment in SaaS player Shoplazza, led by SoftBank Vision Fund 2. Meanwhile, L Catterton has backed Nebula Brands, a platform that acquires China-based Amazon vendors and helps them scale.
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